Analyst Conference 17 May 2018

Transcription

1 Analyst Conference 17 May 2018 Dr. Wolfgang Heer (CEO), Thomas Kölbl (CFO) Südzucker Analyst Conference, 17 May 2018, page 1

2 Analyst Conference 17 May 2018 Dr. Wolfgang Heer (CEO) Südzucker Analyst Conference, 17 May 2018, page 2

3 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 3

4 Financial year 2017/18: Revenues and operating result by segments Revenues by segment (mn ) Operating result by segment (mn ) 6,476 1, % % 6,983 1, % % , % 1, % 158 2, % 3, % / / / /18 Südzucker Analyst Conference, 17 May 2018, page 4

5 Financial year 2017/18: Group Revenues increase to 7.0 (prev. year: 6.5) bn Earnings improvement by 4.5 % to 445 (prev. year 426) mn Financial key data (mn ) 7,533 6, ,387 6,476 6,983 Forecast 2017/18: bn revenues Segment sugar compensates earnings decrease in special products and CropEnergies Segment fruit with further earnings increase 2017/18: forecasted revenues and earnings ranges achieved /14 14/15 15/16 16/17 17/18 Forecast 17/ mn operating result Revenues Operating result Südzucker Analyst Conference, 17 May 2018, page 5

6 Segment sugar: Environment and Development Higher production volumes due to increase in acreage Higher beet volumes increase capacity utilization EU and global production increase lead to significantly lower prices Unfavourable FX development USD vs. as an addition price burden Key operating indicators (compared to previous year) Sugar price development /t Acreage Campagne duration Production volume EU price reporting (bulk quota sugar) White sugar quotation (London No. 5) +16 % +24 % +26 % 0% +5% +10% +15% +20% +25% +30% End of EU quota / minimum beet price system Feb. 15 Aug. 15 Feb. 16 Aug. 16 Feb. 17 Aug. 17 Feb. 18 Südzucker Analyst Conference, 17 May 2018, page 6

7 Segment sugar: Outlook Outlook with high uncertainty Expectation of surplus in current sugar marketing year Pricing pressure to stay Assumption of decrease in revenues and operating loss of 100 to 200 million Continuation of efficiency measures World sugar balance F.O. Licht per sugar marketing year* (surplus in mn t raw value) ** 5.0** 2014/ / / /18e 2018/19e * timeframe 1st October to 30th September of following year ** Forecast Südzucker Analyst Conference, 17 May 2018, page 7

8 Segment special products Business activity Leading producer of functional ingredients for food, animal feed, non-food and pharmaceutical products from crop based raw material Development Capacity bottleneck solved via efficiency gains Successful commercialisation via distribution sites in growth regions Outlook Further sales growth in all product categories Business activity Leading private label producer especially deep frozen pizza in Europe and USA Development Strengthening of market position in Europe via HASA acquisition Successful entry into growth market USA via acquisition of Richelieu Foods Outlook Further sales growth and leverage of synergies Südzucker Analyst Conference, 17 May 2018, page 8

9 Segment special products Business activity European market leader in configuration, production and distribution of high quality portion packs Development Counteraction against difficult environment, especially in gastronomy and with large-scale consumers Business activity Bundled starch and bioethanol activities for AGRANA and Südzucker in Austria, Hungary, Romania and Germany Development Added value via focus on specialty products Capacity increase to match growing demand Outlook Ongoing challenging market environment Outlook Positive market outlook supports further growth Südzucker Analyst Conference, 17 May 2018, page 9

10 Segment CropEnergies Development Ethanol/Wheat prices Segment development: Most important drivers High ethanol price volatility Uncertainty in light of political EU framwork Outlook Production surplus expected in Europe and USA Ethanol price expected below the level beginning of Ethanol quotation EU Milling wheat quotation EU 50 Feb. 15 Aug. 15 Feb. 16 Aug. 16 Feb. 17 Aug. 17 Feb. 18 * indexed, = 100 Volume development CropEnergies 1,283 1,277 1, /15 15/16 16/17 17/18 Bioethanol (Tsd. t.) Food and animal feed (Tsd. t.) Südzucker Analyst Conference, 17 May 2018, page 10

11 Segment fruit Business activity Leading global fruit preparation producer for dairy, bakery and ice cream industry Development Growing demand matched via local capacity expansion (India, China) Product development takes into account customer needs like naturelness and texture innovations Business activity Leading European apple and berry juice concentrate producer Development Consistent monitoring of market trends concerning fruit content and production methods Weather conditions with high influence on harvest volume and quality (applies to whole fruit segment) Outlook: Positive outlook for further growth in segment fruit Südzucker Analyst Conference, 17 May 2018, page 11

12 Forecast and dividend proposal Forecast 2018/19 Group revenues: bn Operating result: mn Solid financing supports further investments to secure competitive position of Südzucker Dividend proposal 2017/18 Transparent dividend policy following earnings development Dividend proposal of 0.45 /per share Payout: 92 mn * 1,00 0,80 0,60 0,40 0,20 0,00 2.5% Dividend development 1.8% 2.2% * * Proposal ** Based on closing price % 3.0%** 13/14 14/15 15/16 16/17 17/18 Divdend ( ) Dividend yield (%) 4% 3% 2% 1% 0% Südzucker Analyst Conference, 17 May 2018, page 12

13 Analyst Conference 17 May 2018 Thomas Kölbl (CFO) Südzucker Analyst Conference, 17 May 2018, page 13

14 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 14

15 Key figures (I) 2016/ /18 Revenues 6.5 bn 7.0 bn EBITDA 709 mn 757 mn Operating Result 426 mn 445 mn Net earnings 312 mn 318 mn Earnings per share Dividend per share * * Proposal Südzucker Analyst Conference, 17 May 2018, page 15

16 Key figures (II) 2016/ /18 Cash flow 634 mn 693 mn Investments Fixed Assets Investments Financial Assets Net Financial Debt 329 mn 361 mn 164 mn 432 mn 413 mn 843 mn Liquidity 2.8 bn 2.9 bn Equity ratio 56 % 54 % Südzucker Analyst Conference, 17 May 2018, page 16

17 Earnings increase mainly driven by segment sugar (mn ) 2017/ /17 Δ Fruit Sugar Group Special Prod. Crop- Energies Revenues ,8% Operating Result ,2% Revenues ,6% Operating Result ,7% Revenues ,8% Operating Result ,0% Revenues ,4% Operating Result ,5% Revenues ,5% Operating Result ,3% Well divesified operating result Increase in operating result driven by strong H1 development in segment sugar (despite weakening H2) Special products and CropEnergies weaker than previous year but stronger than expected 1791 Growth potential in segment fruit hampered by weather related weak apple harvest in 658 autumn 2017 Successful diversification strategy Südzucker Analyst Conference, 17 May 2018, page 17

18 Diversified and strong cash flow base* operating result share in % Net Financial Debt 31 % 17 % 16 % Depreciaton 313 EBITDA Cash flow 36 % Crop- Energies 158 Sugar Fruit Special Products operating result segments * Financial year 2017/18 in mn Südzucker Analyst Conference, 17 May 2018, page 18

19 Return on Capital Employed (RoCE) 6,650 Capital Employed (mn ) 5,873 5,877 5,791 6,012 6,041 Group RoCE (%) 10.6 % 3.1 % 4.2 % 7.1 % 6.7 % 6.3 % 2013/ / / / /18 Ø 5 years Sugar 13.7 % 0.2 % -2.6 % 2.3 % 4.2% ~3.6 % RoCE Special Products 6.3 % 8.7 % 11.9 % 12.2 % 7.7 % ~9.3 % CropEnergies 6.4 % -2.2 % 17.7 % 20.4 % 15.9 % ~11.6 % Fruit 8.1 % 8.4 % 7.5 % 8.3 % 9.0 % ~8.3 % Südzucker Analyst Conference, 17 May 2018, page 19

20 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 20

21 Income from operations (mn ) 2017/ /17 Revenues Operating result Restructuring costs/special items Income from companies consolidated at equity Income from operations (EBIT) Result from restructuring and special items: Main expenses for restructuring and reoganization programs Main income out of excess EU production levies in sugar marketing years 1999/2000 and 2000/2001 property disposals and insurance payouts related to a fire at the Ochsenfurt sugar factory in summer 2017 Income from companies consolidated at equity: Segment sugar:-29 (7) mn ; relates mainly to participation in ED&F MAN Segment special products: 31 (28) mn ; share of earnings from Hungrana group s starch and bioethanol activities Südzucker Analyst Conference, 17 May 2018, page 21

22 Net earnings (mn ) 2017/ /17 Income from operations (EBIT) Financial result Earnings before income taxes Taxes on income Net earnings Financial result: Net interest result -31 (-27) mn on previous year s level Result from other financing activities -8 (-7) mn Tax rate: Group tax rate 26 (23) % Südzucker Analyst Conference, 17 May 2018, page 22

23 Earnings per share (mn ) 2017/ /17 Consolidated net earnings thereof Südzucker AG shareholders thereof hybrid capital of which attributable to other non-controlling interests Earnings per share ( ) 1,00 1,05-0,05 Other minority interests relate mainly to minority shareholders of the AGRANA Group and CropEnergies Group. Earnings per share: 1.00 (1.05) Dividend proposal: 0.45 (0.45) /share Payout: 92 (92) mn Südzucker Analyst Conference, 17 May 2018, page 23

24 Investments and depreciations (mn ) 2017/ / /18 Fixed Assets Depreciation 313 Sugar Sugar 139 Special Products Special Products 97 CropEnergies CropEnergies 39 Fruit Fruit 38 Financial Assets Total investments Investment focus Sugar: Efficiency and logisitics Special products: Development of new production capacities division starch and plant optimization at BENEO and Freiberger Fruit: New production capacities in division fruit preparations Investments in financial assets Special products: Mainly acquisitions of pizza producers Richelieu (USA) and HASA (Germany) Südzucker Analyst Conference, 17 May 2018, page 24

25 Development Net Financial Debt (mn. ) Dividend payments 18 Others 411 Investments in financial assets 693 NFD Capex NFD NFD Cash flow Working Capital Südzucker Analyst Conference, 17 May 2018, page 25

26 Financial key figures 1632 Net Financial Debt Cash flow mn / / / / / / / / / /18 NFD/CF Equity Ratio 3.2x 42 % 1.9x 1.4x 1.0x 0.5x 0.8x 1.5x 1.2x 0.7x 1.2x 47 % 51 % 48 % 54 % 53 % 53 % 55 % 56 % 54 % Südzucker Analyst Conference, 17 May 2018, page 26

27 Targets 2017/18 achieved Outlook 2017/18 Reported 2017/18 Revenues bn 7.0 bn Operating Result mn 445 mn Investments Fixed Assets ~ 350 mn 361 mn Net Financial Debt mn deutliche 843 mn Ergebniserholung Südzucker Analyst Conference, 17 May 2018, page 27

28 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 28

29 Three strong anchors in the capital market Südzucker AG Zucker Invest GmbH (10%) Freefloat (33%) Market Cap 2.9 bn SZVG* (57%) AGRANA Beteiligungs-AG CropEnergies AG Südzucker indirect via Z&S** (39%) Südzucker direct (3%) Südzucker (69%) Market Cap 1.5 bn Freefloat (19%) Market Cap 0.5 bn Z&S** (78%) SZVG* (6%) Freefloat (25%) Südzucker Analyst Conference, 17 May 2018, page 29 * Süddeutsche Zuckerrübenverwertungs-Genossenschaft eg ** Z&S Zucker und Stärke Holding AG (~50% Südzucker, ~50% ZBG (Zucker-Beteiligungsgesellschaft m.b.h.))

30 Investment Grade Rating Rating agency Long-term rating Short-term rating BBB * Stable Outlook * A 2 * Baa 2 ** Negative Outlook *** P 2 ** * since 23 June 2017 ** since 17 June 2014 *** since 5 April 2018 Südzucker Analyst Conference, 17 May 2018, page 30

31 Unchanged high liquidity* (mn ) Net financial debt Cash & Cash equivalents / securities Gross financial debt Long-term financial debt Short-term financial debt Bank credit lines: undrawn Syndicated loan facility undrawn Syndicated loan facility Agrana undrawn Commercial paper program undrawn = Total liquidity reserves * IFRS 11 adjusted since 28 February 2014 Südzucker Analyst Conference, 17 May 2018, page 31

32 Favourable financing maturity profile (mn as of 28 February 2018) EUR-Bond % EUR-Bond 1.25 % EUR-Bond 1.00 % Promissory Notes Syndicated loans 1,050 mn * Commercial Paper Programm 600 mn (permanent) Hybrid Bond 700 mn (perpetual) 5.25 % p.a. before June 2015 payout annually / since June M-Euribor bp payout quarterly * Maturity: 2019/150 mn, 2020/600 mn, 2021/300 mn Südzucker Analyst Conference, 17 May 2018, page 32

33 Still strong balance sheet ratios mn Net Financial Debt Gearing (NFD : Equity) 12,4% 8,4% 16,8% Cash flow NFD / Cash flow 1,2x 0,7x 1,2x Total assets Shareholders' equity Equity ratio 55,0% 56,0% 53,8% Capital Employed RoCE 4,2% 7,1% 6,7% Südzucker Analyst Conference, 17 May 2018, page 33

34 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 34

35 Segment Sugar (mn ) 2017/ /17 Revenues % EBITDA % EBITDA-Margin 9,2% 7,3% Depreciation % Operating Result % Operating Margin 4,6% 2,6% Restructuring and special items Result from companies consolidated at equity Result from operations > 100 Investments % Fixed Assets % Financial Assets / Acquisitions % Capital Employed % RoCE 4,2% 2,3% Δ Südzucker Analyst Conference, 17 May 2018, page 35

36 Segment Sugar: Development 2017/18 Revenues (mn ) Operating Result (mn ) 2,776 3, / / / /18 Increase in sugar sales via production expansion Lower sugar sales revenues, especially in H2 Higher sales volume Lower sugar sales revenues Lower costs Others Südzucker Analyst Conference, 17 May 2018, page 36

37 Segment Sugar: Production and Distribution* European market leader (Market share ~ 25 %) Increase in production utilization to >120 days: Significant production and distribution increase Efficient Pan-European distribution and logistic structure Sustainable production in most productive European beet areas Cost savings throughout the whole value chain Ireland Great Britain Netherlands Belgium France Germany Czech Republic Autstria Poland Slovakia Hungary Romania Moldova Secure and enforce competitiveness and market position Usage of growth opportunities outside of Europe Exports outside of EU Partnership with ED&F MAN (~ 35 % participation) Acquisitions Distribution activities Beet sugar factories Sugar refineries * Display from October 2017 and incl. UK Portugal Spain Italy Bosnia/ Herzegovina Greece Bulgaria Israel Südzucker Analyst Conference, 17 May 2018, page 37

38 Sugar balance EU and world World* EU** 181,5 180,7 175,9 178,6 179,8 174,0 180,9 179,4 194,1 192,7 183,6 186,6 mn t 13/14 14/15 15/16 16/17 17/18e Production EU from beet from maize Import ,2 80,9 71,7 68,2 75,8 80,9 Import white sugar n.a. EU Refining of imported raw sugar n.a. Export / / / / /18e 2018/19e 45,0%* 45,3%* 39,9%* 37,7%* 41,3%* 43,3%* Consumption Ending stocks Production Consumption Ending Stock * Stocks to use ratio * F.O. Licht estimates, April 2018 ** EU-Commission Südzucker Analyst Conference, 17 May 2018, page 38

39 Supply and demand as main drivers Sugar price development ( /t) World market price EU price ex works Δ EU vs. World market price EU and world market*: 2015/16: significant inventory decline first time since 6 years 2016/17: further inventory decrease leads to low inventory level 2017/18e: inventory increase Production: EU +3.6 mn t following end of quota system India mn t following draught in prev. year Thailand +4.1 mn t Brasil -7.5 mn via higher ethanol share and lower yields 2018/19e: Production decrease, but further inventory increase expected Production: EU: ~ -1 mn t Thailand: ~ -1 mn t India: ~ +1 mn t Brasil: ~ +1 mn t * World market price ex works: without transportation and other costs Südzucker Analyst Conference, 17 May 2018, page 39

40 EU sugar market: Market structure from October 2017* (I) Demand EU ~ 19 mn t Supply EU ~ 23 mn t Global demand ~ 184 mn t Retail Bakery Beverages EU beet sugar Local marketing Industrial Chocolate and confectionery EU HFCS/Isoglucose Dairy and fruit products Non-Food Imports White sugar EU Refining Imports** Global marketing * Schematic display: beyond October 2017 (incl. Great Britain) ** only from LDC, ACP, CXL, Andean, Balkans, Central America and from other preferential agreements Südzucker Analyst Conference, 17 May 2018, page 40

41 EU sugar market: Market structure from October 2017* (II) Oct. 17 Oct. 18 Sugar maketing year (Oct. - Sept.) 2016/17 Sugar marketing year (Oct. - Sept.) 2017/18 Sugar marketing year (Oct. - Sept.) 2018/19 Sugar and isoglucose quota Quota sugar: Minimum beet price Exports limited to about 1.4 mn t p.a. Elimination of sugar and isoglucose quota No minimum beet price No export restrictions Business year (Mar. - Feb.) 2017/18 Business year (Mar. - Feb.) 2018/19 Always influenced from two sugar marketing years: Production volumes with and without quota Prices from quota and post-quota time EU to structurally change substainably from import to export market Border Protection: unchanged Import duty 419 /t (white sugar) resp. 339 /t (raw sugar) from non-preferential countries Preferential agreements with LDC-/ACP- and other countries: unchanged * Schematic display Südzucker Analyst Conference, 17 May 2018, page 41

42 Strategy Segment Sugar Defend and extend EU market position Cost savings across the whole value chain Further centralization of administration Maximum utilization factory capacity Sugar Extend production and distribution volumes Usage of ED&F MAN participation potential Advance internationalization/ open up new markets Südzucker Analyst Conference, 17 May 2018, page 42

43 Segment Sugar: Outlook 2018/19 Revenues Further increase in sales volume Price decrease to historical low level Significant decrease in revenues (prev. year: 3,017 mn ) Operating Result Increase in volatility following end of quota and mimimum beet price system in EU sugar market since 1 October 2017 Volume increase, especially exports Very low price level cannot be compensate through decrease in production costs and higher sales volumes Operating result expected in range -100 to -200 mn (prev. year: 139 mn ) Südzucker Analyst Conference, 17 May 2018, page 43

44 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 44

45 Segment Special Products (mn ) 2017/ /17 Revenues % EBITDA % EBITDA-Margin 12,8% 14,4% Depreciation % Operating Result % Operating Margin 7,9% 10,1% Restructuring and special items % Result from companies consolidated at equity % Result from operations % Investments > 100 Fixed Assets % Financial Assets / Acquisitions Capital Employed % RoCE 7,7% 12,2% Δ Südzucker Analyst Conference, 17 May 2018, page 45

46 Segment Special Products: Development 2017/18 Revenues (mn ) Operating Result (mn ) 1,819 1, / / / /18 Positive sales development Acquisition of Richelieu and HASA Higher sales volume Higher depreciation level Higher material and other costs Others Südzucker Analyst Conference, 17 May 2018, page 46

47 Segment Special Products: Overview Leading market positions in all four divisions Sustainably high cash flow quality Very good fundamental development Growth based on global megatrends: unchanged trend to alternative and functional food ingredients further increase in demand for convenience products Unbroken global increase in demand for animal feed (e.g. Gluten) Continuous capacity adjustment follows market growth Starch* 38 % 85 Revenue split 2017/18 PortionPack 6 % 1,997 mn Operating Result (mn ) Freiberger 32 % BENEO (Functional Food) 24 % * incorporates AGRANA bioethanol and starch activities 2013/ / / / /18 Südzucker Analyst Conference, 17 May 2018, page 47

48 Segment Special Products: Division Freiberger (I) Market entry USA USA largest frozen pizza market (5.2 bn USD) worldwide with further growth potential Private label market share EU >50 % Private label market share USA ~16 % Acquisition of Richelieu Foods: Market leader in USA private label pizza segment ( B2B ) Main product categories: frozen and chilled pizza and pourables Revenues: ~ 300 mn (2017e) 5 production sites across the USA; distribution across the USA ~ 900 employees Südzucker Analyst Conference, 17 May 2018, page 48 Wheeling, Illinois

49 Segment Special Products: Division Freiberger (II) - incl. acquisition Richelieu Foods 11 production sites in EU (6) and in USA (5); distribution in EU and USA Main product categories: Deep frozen and chilled pizza Pasta dishes Snacks & baguettes Pourables Mostly own label business for food retailing ( B2B ) Market leader private label pizza market in Europe and USA Employees: ~ 3,500 Pizzas per day: ~ 3.5 mn Revenues: ~ 1 bn # 1 Europe # 1 USA Strong platform for further growth Production facility Public Warehouses Pizza Public Warehouses Pourables Südzucker Analyst Conference, 17 May 2018, page 49

50 Strategy Segment Special Products BENEO Usage of global platform, open up new markets; product innovations PortionPack Europe Extension of EU No. 1 position; expansion of product portfolio Special Products Starch Extension of successful niche strategy; increase market share via continuous capacity increase Freiberger Further internal and external growth; e.g. Richelieu Foods Südzucker Analyst Conference, 17 May 2018, page 50

51 Segment Special Products: Outlook 2018/19 Revenues Full-year consolidation of Richelieu Foods and further increase in sales volumes Significant increase in revenues (prev. year: 1,997 mn ) Operating Result Full-year consolidation of Richelieu Foods Further increase in sales volumes and lower raw material costs Significant increase in operating result expected (prev. year: 158 mn ) Südzucker Analyst Conference, 17 May 2018, page 51

52 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 52

53 Segment CropEnergies (mn ) 2017/ /17 Revenues % EBITDA % EBITDA-Margin 13,7% 18,6% Depreciation % Operating Result % Operating Margin 8,9% 13,4% Restructuring and special items % Result from companies consolidated at equity Result from operations % Investments % Fixed Assets % Financial Assets / Acquisitions Capital Employed % RoCE 15,9% 20,4% Δ Südzucker Analyst Conference, 17 May 2018, page 53

54 Segment CropEnergies: Development 2017/18 Revenues (mn ) Operating Result (mn ) / / / /18 Increase in production and sales volumes Ethanol sales revenues on prior year s level Higher sales volumes Higher net raw material costs Additional costs via full-year operation of Ensus Others Südzucker Analyst Conference, 17 May 2018, page 54

55 Segment CropEnergies: Overview 4 production sites in EU; offices/distribution sites in EU, North and South America Main product categories: Bioethanol as fuel and traditional applications (1.3 mn m³ p.a.) Food and animal feed (>1 mn t p.a.) EU market leader Megatrend renewable energy EU target 2020 transport sector: 10 % from renewable energy sources Reduction of greenhouse gas emissions Higher independency from imported oil Sustainable raw materials from European agriculture and complete utilization Houston Santiago de Chile São Paulo Rotterdam Loon-Plage Wilton Wanze Duisburg Zeitz Production facility Tank storage Distribution Südzucker Analyst Conference, 17 May 2018, page 55

56 Segment CropEnergies: Market environment High ethanol price volatility Quotation: Wheat /t / Ethanol /m 3 Grain supply/demand 2017/18 World harvest*: 2,075 mn t (-2 %) near record NYMEX Fuel EtOH T2 FOB Rdm High world ending stocks*: 496 (518) mn t EU harvest 307 mn t (+3 %) exceeds consumption of 285 mn t ( /m 3 ) ( /t) Current E10 market share in Europe: Belgium: 80 % Euronext Paris Wheat No France: 42 % Finland: 68 % Germany: 13 % Nettorohertrag für Weizen EtOH * All grain qualities/-grades without rice Wanze Südzucker Analyst Conference, 17 May 2018, page 56

57 EU Biofuel (BF) targets 2020 and draft for transport target: 10 cal.-% renewables Share renewable energy in transport sector Draft 2030 RED II*: More or less fossil fuel? Overall 27 cal.-% renewable energies; transport: obligation only for advanced BF and other low emission fuels 10 % 8 % 6 % 4 % physical multiple counting target 6,6 % 3,9 % 5,2 % 7,0 % 7,2 % Replacing crop-based BF by advanced BF 2 % 2,5 % Climate and energy targets need both Advanced BF and BF from arable, protein rich local crops Dilemma: destroying investor confidence cuts off investments in advanced BF 0 % Source: Eurostat (2017) *EU COM, November 2016 Südzucker Analyst Conference, 17 May 2018, page 57

58 Strategy Segment CropEnergies Further efficiency gains Strengthen leading market position Expand multi-site approach CropEnergies Full usage of production capacities Expand diversification Enforce R&D activities Südzucker Analyst Conference, 17 May 2018, page 58

59 Segment CropEnergies: Outlook 2018/19 Revenues Constant sales volumes Ongoing high capacity usage Revenues expectation 760 bis 820 Mio. (prev. year: 808 mn ) Operating Result Largely depends on volatile bioethanol prices development Low price level beginning of business year; bioethanol future price indicates price increase throughout the year Operating result expected in range 30 to 70 mn (prev. year: 72 mn ) Südzucker Analyst Conference, 17 May 2018, page 59

60 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 60

61 Segment Fruit (mn ) 2017/ /17 Revenues % EBITDA % EBITDA-Margin 9,7% 9,5% Depreciation % Operating Result % Operating Margin 6,5% 6,2% Restructuring and special items Result from companies consolidated at equity Result from operations % Investments % Fixed Assets % Financial Assets / Acquisitions % Capital Employed % RoCE 9,0% 8,3% Δ Südzucker Analyst Conference, 17 May 2018, page 61

62 Segment Fruit: Development 2017/18 Revenues (mn ) Operating Result (mn ) 1,155 1, / / / /18 Increase in sales volume fruit preparations Decrease in sales volume fruit juice concentrates Fruit preparations Higher sales volume Margin increase via lower costs Fruit juice concentrates Lower sales volume (poor apple harvest) Margin reduction via increase in costs Südzucker Analyst Conference, 17 May 2018, page 62

63 Segment Fruit: Fruit preparations Division fruit preparations 28 production sites globally; distribution in more than 80 countries World market leader in fruit preparations (market share >30%) Main customer groups: Dairy companies Ice cream producers Bakeries Food service industry Unique global structure for sourcing, production and distribution Production facility Südzucker Analyst Conference, 17 May 2018, page 63

64 Segment Fruit: Fruit juice concentrates Division fruit juice concentrates 13 production sites in Europe and one in China Main product categories: Fruit juice concentrates Beverage compounds Fruit wines Flavouring NFC-Juices European market leader for fruit juice concentrates Trend towards fruit juices and bioproducts unchanged Production facility Südzucker Analyst Conference, 17 May 2018, page 64

65 Strategy Segment Fruit Further usage of global growth trends Usage of internal/external growth options Exploitation of shared group customer base Fruit Development of innovations Market entry India / second factory China Further cost saving measures Südzucker Analyst Conference, 17 May 2018, page 65

66 Segment Fruit: Outlook 2018/19 Revenues Division fruit preparations with increase in revenues in light of higher volumes Division fruit juice with significant revenues increase Significant increase in revenues (prev. year: 1,161 mn ) Operating Result Division fruit preparations with moderate earnings increase in light of sales volume increase Division fruit juice concentrates with significant earnings increase Operating result expected significantly above previous year s level (prev. year: 76 mn ) Südzucker Analyst Conference, 17 May 2018, page 66

67 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 67

68 Outlook 2018/19 (I): Revenues and Operating Result Revenues (in ) Operating Result (in ) 2017/ /19e 2017/ /19e Sugar 3.0 bn 139 mn -100 to -200 mn Special Products 2.0 bn 158 mn CropEnergies 808 mn mn 72 mn mn Fruit 1.2 bn 76 mn Group 7.0 bn 6.8 to 7.1 bn 445 mn 100 to 200 mn Südzucker Analyst Conference, 17 May 2018, page 68

69 Outlook 2018/19 (II): Other key figures 2017/ /19e EBITDA 757 mn 420 to 520 mn Depreciation 313 mn > prev. year Investments Fixed Assets 361 mn ~ prev. year Net Financial Debt 843 mn > prev. year Südzucker Analyst Conference, 17 May 2018, page 69

70 Outlook 2018/19 (III): Other key figures 2017/ /19e RoCE 6.7 % < prev. year Cash flow 693 mn < prev. year Cash flow/ Revenues 9.9 % < prev. year Equity ratio 53.8 % < prev. year Südzucker Analyst Conference, 17 May 2018, page 70

71 Outlook 2018/19 (IV)*: Diversification non sugar Diversification non sugar Sugar Group EBITDA Depreciation Operating Result ~ ~ 140 ~ ~ ~ v 2018/19e * in mn Südzucker Analyst Conference, 17 May 2018, page 71

72 Summary Sugar Special Products CropEnergies Fruit Group At least two difficult transition years Decrease in production costs and higher sales volumes cannot compensate historcial low price level Expectation H1 break even and H2 operating loss FY 2018/19: Earnings expected -100 to -200 mn (prev. year: 139 mn ) Further growth option via acquisition of Richelieu Foods and capacity expansion starch FY 2018/19: Significant earnings increase (prev. year: 158 mn ); ongoing high cash flow quality Despite ongoing volatile ethanol prices, still solid earnings level expected FY 2018/19: Expected earnings range mn (prev. year: 72 mn ) expected FY 2018/19: Further significant revenues and earnings increase expected (prev. year: 76 mn ) Well diversified portfolio High cash flow quality and solid financial key figures, despite temporary burden in segment sugar Foresighted financing and strong balance sheets ratios Südzucker Analyst Conference, 17 May 2018, page 72

73 Südzucker Analyst Conference, 17 May 2018, page 73

74 Long-term development (I): Group (mn ) 2007/ / / / / / / / / / /19e Revenues bn EBITDA EBITDA-Margin 8,3% 11,3% 12,6% 14,5% 15,8% 11,8% 6,7% 8,1% 10,9% 10,8% Operating Result Operating Margin 4,4% 7,0% 8,5% 10,7% 12,3% 8,3% 2,7% 3,8% 6,6% 6,4% Income from operations (EBIT) Earnings before income taxes (EBT) Net earnings thereof to SZ AG shareholders Market capitalization Closing price on February 28/29 13,66 17,06 19,90 21,75 33,55 20,15 13,63 13,88 24,10 14,76 Earnings per share ( ) 0,86 1,06 1,33 1,99 3,08 1,37 0,10 0,53 1,05 1,00 Dividend per share ( ) 0,40 0,45 0,55 0,70 0,90 0,50 0,25 0,30 0,45 0,45 Cash flow < prev. year Investments total ~ prev. year Capital Employed > prev. year RoCE 5,2% 7,5% 9,8% 13,2% 16,3% 10,6% 3,1% 4,2% 7,1% 6,7% < prev. year Total Assets Equity Equity Ratio 41,9% 46,5% 50,8% 47,9% 53,7% 53,4% 52,6% 55,0% 56,0% 53,8% < prev. year Net Financial Debt (NFD) > prev. year Gearing (NFD/Equity) 50,5% 30,9% 23,2% 19,9% 9,8% 11,6% 13,3% 12,4% 8,4% 16,8% NFD/Cash flow 3,2x 1,9x 1,4x 1,0x 0,5x 0,8x 1,5x 1,2x 0,7x 1,2x > prev. year ** * * Investments in Fixed Assets ** Proposal Südzucker Analyst Conference, 17 May 2018, page 74

75 Long-term development (II): Segments Segment Sugar (mn ) 2013/ / / / /18 Revenues EBITDA EBITDA-Margin 14,3% 4,1% 1,7% 7,3% 9,2% Depreciation Operating Result Operating Margin 11,2% 0,2% -2,7% 2,6% 4,6% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 13,7% 0,2% -2,6% 2,3% 4,2% Segment Special Products (mn ) 2013/ / / / /18 Revenues EBITDA EBITDA-Margin 9,0% 11,2% 13,7% 14,4% 12,8% Depreciation Operating Result Operating Margin 4,9% 7,0% 9,5% 10,1% 7,9% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 6,3% 8,7% 11,9% 12,2% 7,7% Segment CropEnergies (mn ) 2013/ / / / /18 Revenues EBITDA EBITDA-Margin 9,5% 3,3% 18,5% 18,6% 13,7% Depreciation Operating Result Operating Margin 4,9% -1,5% 13,2% 13,4% 8,9% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 6,4% -2,2% 17,7% 20,4% 15,9% Segment Fruit (mn ) 2013/ / / / /18 Revenues EBITDA EBITDA-Margin 9,0% 9,8% 9,4% 9,5% 9,7% Depreciation Operating Result Operating Margin 5,5% 6,1% 5,7% 6,2% 6,5% Restructuring and special items Income from operations (EBIT) Investments Fixed Assets Financial Assets Capital Employed RoCE 8,1% 8,4% 7,5% 8,3% 9,0% Südzucker Analyst Conference, 17 May 2018, page 75

76 Financing maturity profile (as of 28 February 2018) March % Bond 2011/2018, 400 mn April 2019/22 Agrana promissory notes, 43 mn 2019/20/21 Syndicated loans, mn Drawn lines: 0 mn November % Bond 2016/2023, 300 mn November 2025 Perpetual Perpetual 1.00 % Bond 2017/2025, 500 mn Hybrid Bond 2005/perpetual, 700 mn Issuer call right since 30 June 2015 at the earliest. Pursuant to 6 (5) and (6) of conditions of issue the exercise of the call right is subject to having issued, within the twelve month preceding the redemption becoming effective, replacement capital (parity and/or junior securities and/or shares) against issue proceeds at least equal to the amounts payable upon redemption. Commercial Paper-Program, permanent, 600 mn Drawn lines: 0 mn Südzucker Analyst Conference, 17 May 2018, page 76

77 Hybrid bond: 2017/18 cash flow covenant* safely achieved (mn ) 2008/ / / / / / / / / / /19e Revenues 5,871 5,718 6,161 6,992 7,879 7,533 6,778 6,387 6,476 6, bn Cash flow < prev. year Cash flow / Revenues 8.6% 9.7% 9.8% 11.8% 12.6% 9.3% 5.7% 7.5% 9.8% 9.9% < prev. year * IFRS 11 adjusted since 2013/14 Cash flow covenant (cash flow / revenues >5 %) so far significantly exceeded Options for hybrid bond 2005 (depending on continuous financial planning): Since 30 June 2015: quarterly variable interest payment, 3M Euribor plus 3.10 % p.a. Period from 29 March 2018 to 29 June 2018 (excl.), rate of remuneration fixed at % p.a. Since 30 June 2015, bond can be called and redeemed on quarterly basis at nominal value (according to 6 (5) & (6) of the terms and conditions) Precondition to use issuer call right is replacement through new hybrid or equity capital within 12 months A bond repurchase also partially is possible at any time Still preferred option: No call of hybrid bond Südzucker Analyst Conference, 17 May 2018, page 77

78 Liquidity profile end of period* (mn ) Q4 2017/18 Q3 2017/18 Q2 2017/18 Q1 2017/18 Q4 2016/17 Net financial debt Cash & Cash equivalents / securities Gross financial debt Long-term financial debt Short-term financial debt Bank credit lines undrawn Syndicated loan undrawn Syndicated loan Agrana undrawn Commercial paper program undrawn Bank credit lines (undrawn) Cash & cash equivalents / securities Syndicated loan (undrawn) Commercial paper (undrawn) = Total liquidity reserves * IFRS 11 adjusted Südzucker Analyst Conference, 17 May 2018, page 78

79 Group balance sheet (mn ) (mn ) Intangible assets ,8% ,2% Fixed assets ,0% ,5% Shares in companies consolidated at equity 370 4,0% 433 5,0% Other investments and loans 23 0,2% 24 0,3% Securities 19 0,2% 19 0,2% Receivables and other assets 12 0,1% 10 0,1% Deferred tax assets 80 0,9% 132 1,5% Non-current assets ,2% ,7% Inventories ,7% ,5% Trade receivables and other assets ,1% ,5% Current tax receivables 33 0,4% 21 0,2% Securities 126 1,3% 126 1,4% Cash and cash equivalents 585 6,3% 581 6,6% Current assets ,8% ,3% Equity attributable to shareholders of SZ AG ,0% ,3% Hybrid capital 654 7,0% 653 7,5% Other minority interest 915 9,8% ,2% Shareholder's equity ,4% ,0% Provisions for pensions and similar obligations 781 8,4% 823 9,4% Other provisions 91 1,0% 92 1,0% Non-current financial liabilities ,0% ,5% Other liabilities 16 0,2% 24 0,3% Tax liabilities 83 0,9% 103 1,2% Deferred tax liabilities 164 1,8% 81 0,9% Non-current liabilities ,1% ,4% Other provisions 250 2,7% 233 2,7% Current financial liabilities 456 4,9% 221 2,5% Trade payables and other liabilities ,2% ,9% Current tax liabilities 25 0,3% 49 0,6% Current liabilities ,1% ,7% Total assets ,0% ,0% Total liabilities and shareholders' equity ,0% ,0% Südzucker Analyst Conference, 17 May 2018, page 79

80 Agenda 1. Overview and strategic objectives page 4 2. Financial Highlights page Annual Financial Statement 2017/18 page Financing page Development of Segments Sugar page 35 Special Products page 45 CropEnergies page 53 Fruit page Outlook page Appendix Long-term development and key figures page 74 Additional information page 81 Südzucker Analyst Conference, 17 May 2018, page 80

81 Revenues by region 2017/18 Germany (24 %) Rest of world (20 %) 6,983 mn EU 28 (56 %) Revenues share financial year 2017/18 by region in %: EU 28: EU-members (excl. Germany, incl. Great Britain) Rest of the world: Europe (outside EU), America, Africa, Asia, Oceania Südzucker Analyst Conference, 17 May 2018, page 81

82 350 World sugar market unchanged sustainable growth mn t** 250 mn t** Südzucker Analyst Conference, 17 May 2018, page 82 Surplus/Defict* (right scale) Total Production* (left scale) Consumption* (left scale) * Source: F.O. Licht ** FAO-estimate

83 Global sugar market: Supply and demand Canada USA Mexico Guatemala El Salvador Cuba Colombia Brazil EU Morocco Algeria Nigeria Ukraine +0,63 Israel Egypt Sudan Syria Saudi Arabia Japan Pakistan China Bangladesh S. Korea Thailand Taiwan Malaysia Indonesia Surplus areas Chile Swaziland Australia Deficit areas Source: International Sugar Organisation (ISO) Südzucker Analyst Conference, 17 May 2018, page 83 Only countries with deficits/surpluses above 500k tonnes are marked (2017/18)

84 EU sugar balance mn t 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 Ø 8 years 17/18e Production EU , from beet , from maize ,7 0.9 Import ,1 1.2 Import white sugar EU refining of imported raw sugar ,8 n.a ,3 n.a. Export ,5 3.3 Consumption , Ending stock ,4 2.4 Südzucker Analyst Conference, 17 May 2018, page 84 Source: EU-Commission

85 Ranking global sugar market (I) Top-producer 2018/19e in mn t 2018/19e in % 10 years in mn t Top-consumer 2018/19e in mn t 2018/19e in % 10 years in mn t Brazil India India EU EU China Thailand Brazil China USA USA Indonesia Pakistan Russia Russia Pakistan Mexico Mexico Australia Egypt Others Others Total Total Südzucker Analyst Conference, 17 May 2018, page 85 Source: F.O. Licht

86 Ranking global sugar market (II) Top-net-exporter 2018/19e in mn t 2018/19e in % 10 years in mn t Top-net-importer 2018/19e in mn t 2018/19e in % 10 years in mn t Brazil China Thailand Indonesia Australia USA Guatemala Bangladesh EU Algeria Mexico Malaysia Cuba Nigeria Pakistan Korea, South Swaziland Saudi Arabia Colombia Egypt Others Others Total Total Duty free access into EU Südzucker Analyst Conference, 17 May 2018, page 86 Source: F.O. Licht

87 Segment Sugar: Campaign 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Beet growers 59,200 47,600 46,000 44,600 43,000 42,600 42,100 41,300 40,300 39,000 37,900 Beet acreage 438, , , , , , , , , , ,000 Sugar factories (incl. refineries) ** 31** Beet processing* Campaign duration Sugar production* thereof from beets* thereof raw sugar raffination* *in mn t **incl. 2 refineries Südzucker Analyst Conference, 17 May 2018, page 87

88 Price development for raw and white sugar (ICE US, LIFFE) Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Quotation for sugar in / ton Feb-11 Feb-12 Feb-13 Feb-14 Feb-15 Feb-16 Quotation for sugar in / ton Feb-17 Feb-18 White sugar contract No. 5 LIFFE London (Future contract switching upon expiry) Raw sugar contract No. 11 ICE US (Future contract switching upon expiry) Südzucker Analyst Conference, 17 May 2018, page 88

89 Price development wheat and maize (Euronext) Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 / ton Feb-11 Feb-12 Feb-13 Feb-14 / ton Feb-15 Feb-16 Feb-17 Feb-18 Wheat price (Future contract switching upon expiry) Price for maize (Future contract switching upon expiry) Südzucker Analyst Conference, 17 May 2018, page 89

90 Disclaimer This presentation contains forward looking statements. The statements are based on current assumptions and estimates made by the executive board and information currently available to its members. The forward looking statements are not to be viewed as guarantees of the future developments and results presented therein. Future developments and results are in fact dependent on a variety of factors and are subject to various risks and imponderables. They are based on assumptions that could in fact prove to be invalid. The risk management report in the 2017/18 annual report on pages 83 to 94 presents an overview of the risks. We assume no obligation to update the forward-looking statements made in this presentation. This presentation includes percentage and number rounding. Typing and printing errors reserved. IFRS 11 application as of financial year 2013/14. Written and visual value statements are standardized as follows: ±1% stable / ±1-4% slight / ± 4-10% moderate / >/< 10% significant Südzucker Analyst Conference, 17 May 2018, page 90

91 Investor Relations Financial calender 12 July 2018 Q1 Quarterly Statement 2018/19 19 July 2018 Annual general meeting for fiscal 2017/18 11 October 2018 Q2 1 st half year report 2018/19 10 January 2019 Q3 Quarterly Statement 2018/19 24 April 2019 Preliminary figures financial year 2018/19 16 May 2019 Press and analysts conference fiscal 2018/19 Contact Nikolai Baltruschat Head of Investor Relations Tel.: +49 (621) nikolai.baltruschat@suedzucker.de Bernhard Juretzek Manager Investor Relations Tel.: +49 (621) bernhard.juretzek@suedzucker.de Sandra Kochner Assistant Tel.: +49 (621) sandra.kochner@suedzucker.de Südzucker AG Maximilianstrasse Mannheim, Germany investor.relations@suedzucker.de Südzucker Analyst Conference, 17 May 2018, page 91